Amendment 64 could shake up medical marijuana industry

Owner Brad Melshenker, left, shows samples of medical marijuana to Mike, at center, and Theo, who asked that their last names not be used, on Wednesday at the Greenest Green dispensary on Arapahoe Avenue in Boulder.
( JEREMY PAPASSO )

Recreational marijuana could supplant the medical marijuana industry statewide and in Boulder in the aftermath of the approval of Amendment 64, industry observers said Wednesday.

That shift, though, would depend on the federal government taking the same relatively hands-off approach it's taken to medical marijuana, on state government developing a regulatory scheme for the industry and on local municipalities not banning recreational marijuana retail operations.

Boulder Mayor Matt Appelbaum said the next year is very uncertain, with a lot depending on how the federal government approaches the issue.

"If they wanted to provide some clarity, that would be nice," he said, echoing similar sentiments from Colorado Attorney General John Suthers.

Colorado's medical marijuana industry took off after President Barack Obama signaled in 2009 that his Justice Department would not bring drug charges against people who were in compliance with their state's medical marijuana statutes. Since then, the U.S. Attorney's Office has forced dozens of pot shops to close because they are within 1,000 feet of a school.

The Boulder City Council took an official position opposing Amendment 64. Individual council members said they don't necessarily think marijuana should be illegal, but they worried the measure would put a new regulatory burden on the city that would be difficult to modify because it was in the form of a constitutional amendment.

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In addition to decriminalizing possession and personal use of up to one ounce of marijuana, Amendment 64 requires the Department of Revenue to develop licensing standards and the state Legislature to levy an excise tax on marijuana. It also requires local jurisdictions to enact regulations by October 2013 if the state government doesn't. Local governments can ban marijuana stores and manufacturing.

That means the City Council will have to decide whether it should apply the same rules it applies to medical marijuana businesses or develop rules, and whether to even allow recreational marijuana businesses within the city.

One question, Appelbaum said, will be how long the city should wait if state efforts seem slow or uncertain, given the October deadline.

Yet, the state's marijuana businesses are likely to transition to serve recreational users, said Boulder attorney Jeff Gard, who represents a number of such businesses. Quite simply, that's where the customers will be.

"Because of the indignity associated with being a medical marijuana patient -- having to go to a doctor, having to submit your stuff to the state, having to be on a registry -- who would do that if you didn't have to?" he said. "Once marijuana is readily available and properly regulated at the retail level, the medical marijuana businesses will go away."

City officials said they agree with that assessment, with the caveat that federal prosecutors might give more leeway to medical use, creating an incentive to preserve that system.

Medical marijuana business owners contacted by the Camera did not want to speak on the record. They said they know as little about what the future holds as everyone else but are watching developments closely.

Statewide, 54.8 percent of voters supported the measure. Boulder County voters backed it at even higher rates, with 66.1 percent voting "yes."

"Given the lopsided margin, I imagine the community wants us to proceed, but would they want us to proceed if we're the only community in Colorado doing it?" Appelbaum asked. "It was sold to them as this will be easy and perfect and everyone will make money off it. It might not be that simple."

University of Colorado law professor Richard Collins said he expects state officials will attempt to comply with the constitutional amendment, but opponents could hold up implementation by objecting to specific aspects of proposed regulations, rather than taking on the legalization question directly.

And federal law will continue to trump local law, Collins said.

"Everything else is a matter of the practicality of enforcement," Collins said. "The drafters know that very well, and that's why they set the possession level at one ounce and the grow limit at six plants. The federal system is not designed to deal with petty crimes."

But manufacturing and selling in a business setting typically triggers thresholds for federal prosecution, putting business owners at risk, he said.

Councilman Macon Cowles said Colorado's congressional delegation should seize the political will and momentum represented by Amendment 64 and Washington state's own legalization measure to press for decriminalization at the federal level.

U.S. Rep. Jared Polis, D-Boulder, said he'll continue to push for decriminalization. In the meantime, he also wants the Justice Department to make its position clear.

"I hope that they can make it clear on paper that this is not their target and continue cooperating with local law enforcement on meth and crack and heroin," he said.

Michael Mathis was forced to close the Hill Cannabis Club after he received a federal enforcement letter. His dispensary was within 1,000 feet of CU.

Yet he remains optimistic about recreational marijuana. He sees it as good for the head shop and clothing store he still owns, The Root on the Hill, and good for Boulder and Colorado.

"We could potentially be the new Amsterdam," he said. "People from all across the country could come here and be tourists."